US Universities charge PhD students out-of-state tuition?

So I was admitted to a PhD program in Political Science in one research oriented public university in the US (top 30). Got a funding offer - TA, stipend, all the bonuses, in-state tuition waiver, But they said they won't cover out-of-state tuition - and there is no way I can establish residency because I am an international applicant. Is it some form of soft rejection, or is it a common thing?

well it's not a soft rejection... to me that implies that you are rejected because you are deemed not good enough (i.e., the rejection part) but they say it in a soft way. this sounds more like you do not meet the criteria for funding. so you need to apply elsewhere.